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                                   STAND. COM. REP. NO. 2935

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  H.B. No. 2716
                                        H.D. 1
                                        S.D. 1




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Government Operations and Housing, to
which was referred H.B. No. 2716, H.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO CONDOMINIUMS,"

begs leave to report as follows:

     The purpose of this measure is to facilitate condominium
self-governance by clarifying requirements regarding the
solicitation of proxies. 

     Your Committee circulated a proposed S.D. 1 on this measure
that replaces the contents of the measure, as received, with
language that requires a mortgage holder or court appointed
receiver or commissioner to pay to an association of apartment
owners (AOAO) the current common expenses chargeable to a
foreclosed apartment.  The proposed S.D. 1 also establishes a
limited priority of an AOAO's lien for unpaid common expenses
over mortgage liens.

     Testimony on the proposed S.D. 1 was heard on March 23,
2000.  The Bank of Hawaii, Hawaii Bankers Association, Hawaii
League of Savings Institutions, Community Associations Institute,
and Mortgage Bankers Association of Hawaii submitted testimony in
opposition to the proposed S.D. 1.  Therefore, upon further
consideration, your Committee has amended this measure by
replacing its contents with the language of S.B. No. 2333,
S.D. 2.

 
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                                   STAND. COM. REP. NO. 2935
                                   Page 2


     As amended, this measure allows AOAOs that have filed a
notice of lien against a delinquent apartment to specially assess
a purchaser in a foreclosure sale for delinquent assessments
chargeable to the apartment, subject to certain conditions and
limitations.  The amount of the special assessment may not exceed
the total amount of unpaid regular monthly common assessments
assessed during the six-month period preceding completion of the
power of sale foreclosure, and may not exceed $1,800.  The cap on
assessments is calculated on an estimated average monthly
maintenance fee of $300 for condominiums in Hawaii, and the
estimated average is based on the limited maintenance fee data
currently available.

     As amended, this measure establishes a drop-dead date for
the Act of December 31, 2003.

     As affirmed by the record of votes of the members of your
Committee on Government Operations and Housing that is attached
to this report, your Committee is in accord with the intent and
purpose of H.B. No. 2716, H.D. 1, as amended herein, and
recommends that it pass Second Reading in the form attached
hereto as H.B. No. 2716, H.D. 1, S.D. 1, and be referred to the
Committee on Judiciary.

                                   Respectfully submitted on
                                   behalf of the members of the
                                   Committee on Government
                                   Operations and Housing,



                                   ______________________________
                                   ROD TAM, Chair

 
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